India's Property market is recovering and there are several factors which are playing vital role to surge the lethargic demand static of property in India
Strategic Key Demand Drivers:
Price correction: Residential Property prices have witnessed a correction across India. This is a healthy sign as it has encouraged conversion of buyer intent into demand.
Apartment down-sizing:Along with the reduction in property prices, developers have down-sized apartments in order to attract a wider breadth of customers and push volume sales. In a few cities, the apartment size has been trimmed by anywhere between 19 and 38 percent. This means that a flat which previously cost Rs 100 has come down to Rs 40-50, enabling a lower segment buyer to select a house at a better location or at the same location but at a lower cost. Some developers have also introduced the concept of condo apartments, one-bedroom and oneand-a-half-bedroom units to widen their customer base.
Cheaper home loans:Over the last two years, till December 2008, home loan rates had moved up steadily. Fixed and floating rates of major banks peaked at around 14.5 percent from 8-8.5 percent in 2007. Banks were agreeing to finance only 70-80 percent of the total property value as against 85-90 percent previously. These factors deterred individual investors from availing of loans especially in conjunction with the job uncertainty induced by the slowdown.
Since October 2008 inflation has begun to cool off and is currently below one percent. Corresponding rate cuts have led private banks to lower interest rates to 9-10 percent (floating), while large state-owned players are offering a special rate of eight percent to buyers. Loan sanctions too have risen to 80-90 percent of the property price, reviving buyer interest.
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